cory: live from pier three in san francisco, welcome to "bloomberg west" where we cover technology, innovation, and the future of business. i'm cory johnson. we are going to check on your bloomberg top headlines -- benjamin netanyahu told u.s. lawmakers and emerging agreement with iran would backfire and even sounded the specter of a nuclear armed islamic republic. speaking to a joint session of the u.s. house and senate in washington, netanyahu said the deal "paves iran's path to the bomb." >> iran has proven time and again that it cannot be trusted.

that's why the first major concession is a source of great concern and leaves iran with a vast nuclear infrastructure and relies on inspectors to prevent a breakup. that concession creates a real danger that iran could get to the bomb by violating the deal. cory: in the past, netanyahu has threatened israeli airstrikes. the state department says hillary clinton used a personal e-mail account while serving as u.s. secretary of state to conduct official business rather than a government account. the state department be and reaching out to former secretary of state's discovered clinton's proclivity toward personal e-mail. 300 e-mails were turned over to a congressional e-mail -- congressional committee investigating benghazi. clinton says there was nothing improper about the use of personal e-mail and all official records were preserved. more video has been released of

the lapd fatally shooting a homeless man on skid row this week. the los angeles place chief says it shows the man reaching toward the officer toss waistband and you can hear the officer cry out that the man had grabbed his gun. the shooting comes amid hyping -- comes amid attention of police officers shooting people across the nation. france possible largest telephone company, orange, has ended speculation about entering the market. stephanie richard says there's no project with the company and the company has its own expansion plan. antitrust regulators have called for a more level playing field for all carriers. >> in my view, the antitrust process in europe is very long. it takes more than one year to get approval.

we are changing ways of technology all the time it takes too long. cory: at the world mobile congress -- world mobile conference blackberry released a new product called the leap. it will cost $275. that's less than half of what apple and samsung phones will go for and will start on sale in europe in april. blackberry plus latest devices are indeed da leave and there are a slew of new smartphones coming out from the mobile world conference in barcelona. at&t and samsung also unveiling new phones. it comes a crucial time with blackberry trying to reclaim the market share it held as recently as 2009. samsung is struggling to keep his foot print in asia and htc is trying to rebound after three years of sales declined to stop the question -- do gadgets matter?

my guess is here in sunny san francisco. it's hard to keep track of these devices. how do you keep track of what mattered? >> there is an arms race that has to do with features and whether you are using image stabilization and how many sensors you are using in the phone. at the end of the day, it is about iconic. do i have the iconic product that's going to attract the next generation user or attract someone off one platform to another platform? that is clearly what samsung and htc are trying to do here. >> into image stabilization -- our consumers picking phones based on the quality of the picture or is that something the

salesperson does in the store or -- there's an online review that moves from one andrew -- one android form -- one android phone to another. >> basically, when you are at the bar, you find a survey that in the top five featured people are looking for, you see image and quality of image or quality of screen in those features will stop but to your point, it's not like it was in pcs were people would study on different sites and compare features. that's a real good picture you took in the bar, what kind of phone is that? that is how it tends to get socialized. cory: samsung is talking about a phone with an image on the sign -- on the side -- this is the third time by my count they have announced this device. they announced it at ces, they announced at last summer in new york, they are announcing it today in barcelona. at some point, can we say it is

announced? does it matter? looks different -- is that the kind of thing that can drive sales to your point? people see something different out in the wild. >> i think it is the start of a trend. we think by 2020, a significant percentage of smartphones will be using multiple surfaces. there's one phone that uses a kindle display -- they use multiple size for notifications and for reading. we think that the edge and the back are blank space that can be used will stop while people might think that the edge is a little bit silly or kitschy i think it's the start of a trend and you will see people experimenting in new ways. cory: that suggests to me the way people buy phones is changing. in this country, people will make a decision about platform

-- they will have an android phone or they will have an iphone. the mitt will go to the store to make the choice will stop is that the way it happens in china and the rest of the world? >> it is. it is a little less about the individual that form, but it certainly plays in in terms of the number of apps you can get access to. but also plays into cost. i travel all around the world. there is a reason why android has such a huge market share around the world. they are able to reach these low-end -- >> john chen trying to find a way in there in between android and iphone -- here's what he had to say at the world conference. >> i am determined to him make software as a business. it's a little different from the past. i will also make sure everything is agnostic.

it is mitch, limited, so i want to serve 100% of the market. cory: it is a cheaper phone, i like john chen a lot personally and it seems like a better direction, but this is back to the direction of going cheap and broad, which is what they said they were going to get away from . >> i would argue his first sentence is the one i agree with most. transitioning into a software and service company. a are trying to go low-end and attract new users, but i think ultimately, you give the people what you want. you really want to focus on those users and retaining them and attracting other users perhaps on the android or ios platform, with things like more securing -- more security, for example. cory: one thing we might see is

an old company doing something anyway from the conference. >> i think wearables are interesting. seeing wah way give it a shot with wearable devices -- i also have to congratulate samsung and what they are doing in payments trying to bring out a service that could be compatible with 90% of the payment terminals that are out there that's a significant volley across the bow of apple. two factor authentication, that could set up a significant battle. cory: we are going to be talking about payments over the course of the next year. thank you very much. "bloomberg west" will be right back. ♪

cory: let's bring you up to speed on some bloomberg headlines -- david petraeus has agreed to plead guilty to having

unauthorized possession of classified information, ending an investigation into allegations he had given information to his mistress. petraeus was forced to resign after affair with his biographer became public. the department of justice has announced j.p. morgan chase will pay $50 million to 25,000 homeowners who were or are in bankruptcy as part of a settlement deal. the bank will also make changes to its internal operations and submit to an oversight by an independent review. in belgium, hundreds of taxis jammed the streets of downtown brussels, protesting the planned reform that could lead to the legalization of on sharing -- of online at ridesharing services of, you guessed it, uber. they say it would be destructive to their business. the race to win digital payments is on as competition between paypal, google and samsung heats up.

yesterday, paypal agreed to acquire a startup that develops mobile payment operations and customer loyalty programs will stop is that enough to give paypal the edge? brad stone spoke with hill ferguson to find out. >> they've built this incredible platform that allows merchants to build custom mobile experiences on top of their own data. one of the exciting things about mobile payments, bringing to bear not just the payment par but the ability to integrate loyalty, coupons and rewards. they've built the perfect platform that will help them build the types of things that will compete, so it's going to be a welcome addition to the paypal family. >> they were working with walmart, target and sears that don't offer services like apple pay right now. does that program give paypal

any kind of exclusive access to those merchants? >> those merchants have come together because they want to make sure they have control over what they do in their stores. so they are giving them that kind of electability. it's in line, giving choice and flexibility to both merchants and consumers. i think they just want to control their destiny around how that experience materializes. >> is that how paypal might differentiate itself, by offering retailers more control over that experience than apple or samsung? >> it's certainly how we differentiate in our online business today. we support all kinds of payment types. we are completely agnostic. if you are a merchant and want to accept apple pay or paypal or samsung whatever it may be, we will do that for you as a merchant partner.

>> you have offered merchants and in-store -- and in-store payment solution. tell us about that and what will be different going forward? >> this is a product for small businesses. it's a mobile solution that helps collect payments in person with their customers. now with the new news we are supporting an nsc payment experience, if you are reading about all of these new payment services how am i going to accept them? the next and ration will support the experience so you know we've got you covered. >> here's my question for you -- in this emerging mobile world where people have devices or

platforms, what does paypal strategically bring to this new world? ask -- >> our strategy is to operate as a troop that form. we are completely agnostic to any kind of technology. -- operate as a true platform. on the consumer side, making sure we are supporting the most open digital wallet on the market, not just supporting credit cards and debit cards, but allowing you to bring in loyalty cards and coupons and frequent flyer points, any type of value that you might want to store in your digital wallet, we want to make sure we distribute that. >> how big of an advantage to these platforms do they have as they come into your space? >> they have a huge advantage. they have a customer base and

huge technology. for the longest time, -- they're pushing a new standard that will push the way for their customers and it's going to be a dynamic platform for years to come. >> we have talked about her new life form called android pay that might empower other businesses. is that just for paypal or is that a potential competitor? >> it's another payment solution our customers need to think about. as merchants get more and more complexity we become a more valued partner to them. we will support any and every payment type for merchants when they want to collect money. it sounds like some of the efforts that have been announced

, so we will support it just like we do the others. >> that was hill ferguson of paypal with brad stone. redstone joins us right now. a really interesting development in the payment world right now. i feel like we are just scratching the surface. >> absolutely. we have seen so much here at the show from google, talking about android pay. the big question is can they compete in this new world? hill ferguson made a good point. there are certain merchants that don't want the apple pay solution. maybe the transition -- the transaction pay is too high. paypal is coming in with a more merchant friendly solution. that will be appealing to emergent like target or walmart or cvs. customers seem to love it. cory: brad stone, thank you very

much. "bloomberg west" will be right back. ♪

cory: the man of the hour in telecom last week was fcc chairman, tom wheeler but this week it is the mobile world conference in barcelona. >> here you are in the belly of the beast. the mobile world congress. how has the reception been among your friends in the mobile industry? >> i don't think they are my former friends. what's interesting is how anxious everybody is to learn exactly what the rules are about and how we structured them in such a way that they are built

on the mobile model. we built them around what has worked for the last 22 years in terms of regulating the wireless industry in the united states so we could make sure there was adequate investment that would continue to come as a result of the fact that there's no rate regulation, no terrifying in those traditional kinds of monopoly regulations you heard so much about during the debate. the feeling i'm getting here is that they are saying as i understand it better, it is significant. sprint has come out and said they supported. t-mobile says they will continue investing under this. google fiber says even though we are now a title ii common carrier, we will continue to investigate the small wireless carriers. all and on and on, there has been a list of people who have said the more we get past the rhetoric and the more we get

word what is really going on here, then perhaps this is something we can work with. >> will the word -- will the road ahead be that easy? can we expect some litigation? x the big dogs have promised they are going to litigate. one of the funny things is everybody talks about this 317 page order. the rules actually take up eight pages and the other 309 pages are the explanation which in many clay -- in many cases because we know the big dogs are going to take it. >> you were a lobbyist at the cable and telecom industry. what was the epiphany for you at the ftc? -- at the fcc? >> i've been a proponent of open

networks before the term net neutrality was ever invented. what they leave out is that i'm a former entrepreneur, a former venture capitalists who understood the importance of open internet. > did the public statement by the obama administration play a role? >> we had been going through a whole process. i propose in february a set of rules that took a slightly different approach using section 706, asking should we use title ii? from february to may to the middle of summer, i met with a whole bunch of consumers and

innovators and investors who have all said there is a real problem in the approach you are looking at. cory: that was brad stone with fcc chairman tom wheeler. are we in a bubble? we will talk about that, next. ♪

cory: you are watching "bloomberg west" where we focus on technology and the future of business. auto executives are taking apple and google seriously as the iphone maker pushes to have electric car by 2020. we spoke with -- >> they intend to produce electric vehicles that could go fast. if they intend to make a lot of engines, it could be difficult for them. to master the physics of automotive's is not so easy. >> he says apple and google will

attract young, tech savvy people to the car business. jack ma says his company followed local laws in taiwan after taiwan's investment commission asked alibaba to leave by the end of august. they said its local entity was registered with singapore rather than mainland china. taiwan views china as its largest military rival. blackrock's dieter fischer says the central bank's bond buying programs are not worrying -- are not working. he says quantitative easing is supposed to put investors into riskier assets. here he is critiquing the fed's calendar view. >> by having the transition from the time pass, they gave us a calendar-based view of rates and now they are trying to move to a data dependent view of rates. we are all left between their time pass and the data. cory: he went on to say the risk

of deflation and europe might mean a rate hike from the fed will end the prices of long-term treasuries. a new report from barclays picks a change at the top for general electric. they say the ceo of ge may step down with any year because investors are demanding such a change. he's been running the company since 2001. a city possible successor is jeff ornstein. an amazing site in southern chile. one of the region's most active volcanoes arrested, prompting authorities to evacuate thousands of people. the volcano is about 400 miles south of santiago and sits above a small city of 22,000 people. the volcano is known to have periodic eruptions every 10 to 15 years. the top story on wall street is the nasdaq raking 5000 for the third time in history. is this a sign of a bubble?

the last time the nasdaq broke a -- broke 5000 was in 2000, just days before the bubble burst. but today, there are same -- are some things that are different. what companies matter right now? joining us to discuss it is our bloomberg contributor. what's not different this time? >> what's not different is investors seem to be really engaged in the magic of growth and technology, very similar to the way they were in 2000. the characteristics as we will discuss are very different this time around. the nasdaq trading at only 1/8 of what was trading at in 2000. the complexion of the companies that make up the index itself -- even apple in 2000 was only 2% of the index and now it's 4% of the index.

apple looking like a value company rather than a growth company, paying dividends. cory: there are lots of numbers we could look at but i think everyone is talking about the price-to-earnings ratio. but if pe -- is pe the right number for us to be looking at? >> i don't think so. on some level with respect to nasdaq, you've got to think of it in price-earnings terms. it was interesting are the things happening pre-nasdaq what's happening in the private markets with these billion-dollar valuations and nominally pre-ipo companies. in some sense, that skews what we seek from nasdaq. that would radically change our perspective.

cory: i think what we care about is not the knuckleheads trying to trade d.c. cmp, but what does it mean for economic activity? what does it mean for the value of my house in the way area, which is inflated takes to all of those private company valuations. when you look at some other things like rise to book value, it starts to reflect what you are suggesting, that we are not looking at the leaders of the nasdaq being hyped up tech stocks like worldcom and you name it from back in the day. book value is pre-for these companies on the nasdaq which is probably a good thing. >> on a relative basis to the s&p, it's very much in line with the expectations people would have to allocating that part of their portfolio. i do think the value of your house does reflect more of paul's concern.

the massive amount of financing that was done late in 2014 where you have almost doubled the rounds of $100 million plus, the majority of which making up the technology sector on a global basis, both in terms of text financing and whether that computes to us being able to continue apace and create jobs and whether these top guys raising billion-dollar valuations have the kind of capital that would be more evenly staged across the companies is the kind of tech dollar g questions we should have been asking in 2000 and we are asking now. >> this is where the income inequality debate starts to matter. if it is concentrated where the wealth is but they can choose not to spend if there's a slight downturn, suddenly, all the rest of you -- all the rest of

america and the world can suffer from the discretionary income of the extraordinarily rich. >> for sure, and particular they don't get to benefit the way the extraordinarily rich do. it's much more difficult to buy shares in uber, snapchat and everything else. there's that famous number sticker in the valley where they said please, god, just give me one more bubble. this time, i will know what to do. people realize i need to own this stuff even sooner. people have moved right out of the public market and taken away an opportunity for wealth creation among a class of people who cannot participate outside the markets and watching it happen leaning outside of nasdaq. cory: let's talk about this sort of value creation. because you have companies like

google and apple doing things like free cash flow generation for these companies, it's a very different thing then we saw, with all the sorts of numbers i've been looking at free cash flow generation for nasdaq is through the roof. >> now it's looking a little bit more like the s&p. it's competitive, particularly as it pertains to the u.s. tenure. certainly the top names in the cap weighted nasdaq are and they are paying dividends in a pretty significant fashion. cory: thank you very much to both of you. "bloomberg west" will be right back. ♪

cory: i'm cory johnson. and this is "bloomberg west."

brad stone spoke with the at&t mobility ceo about at&t's road trip. >> our vision is about everything connected. you have the industrial internet of things. this is all about businesses wanting to be better and more productive. this is one of the greatest opportunities -- we see the car as one of the great opportunities in our lives. we are going to connect 50% of the cars in the united states this year. we have a few of our partners with us at the show, but this is about utilizing that to make the car a safer, better and more productive place. it is about getting vehicle to vehicle and hopefully reducing accidents to make smart cities that are. >> why is at&t's network better suited to this market? >> we have the best network in

the united states. what's important is we started on this along time ago. we were early in the game and we actually built up forms that allow us to be better partners than anyone in the world. i'm really excited about where we are and the partnerships we have, and yes, we are leaving this more significant. >> last week, the fcc put into effect some new net neutrality rules. what do you say to tom today if you see him and how do you react to those rules? >> it's tough to react. we have not seen the order yet. it's supposed to come out and i think it will react once we see it. at&t has said very clearly what our position is and we are pro-net neutrality. the question is the how and how do you govern that?

we will see what it looks like that we are optimistic we can make it work. >> google is one of your big markers. i was talking to a google executive who was talking about perhaps introducing a google branded wireless network. would that be competition for at&t? >> it depends -- i don't know all the details about what they are going to do. i think the key is that customers deserve choice. if google wants to come in, that's great. we are a partner with them but one of the things we have in our world of wireless among partners we compete with, that is fine. we will see what they are working on and see where that goes. >> hearing the term 5g -- i was

just getting used to 4g but what does 5g bring to customers and when can we expect it? >> 5g is great, lt is phenomenal. but what you are hearing is 5g is coming. all of that has not been decided on, but one of the things we are hearing a lot is a real concern about we have to do more with the internet of things. just talking about cars, the connected home -- what we know is that it will bring lower latency and faster speeds, but it's also going to be a network that has a layer built which for us, means lower powder -- lower power and longer rely. i'm excited about it. i think we've got all the capabilities in the world but it is exciting to see what is coming now. >> do you worry that it could incentivize companies to invest?

>> at&t has been clear about our stance. we put out a blog that talked about some of those things. depending on what that order says, we will react to it. >> this is your sixth or seventh mobile world conference. to the extent you have been able to escape the at&t confines, what is different this year? >> go back to six or seven years ago and no one was talking about iot. we were talking about the early days of the smartphone. the iphone launched in mid-2007. what's exciting is the internet of things seems to be the focus. you walk around and see cars in everybody's business. that is showing me that the whole world is going to be connected and that is pretty exciting. cory: redstone with at&t's glenn

lori. i lost count of him using the word exciting. he did not want to seem to answer any questions about that neutrality. that's a big deal. >> at&t is going to sue. they want to stop this regulation from taking place. they want to be regulated as information services and not subject to common carrier rules. they want to manage their own networks and introduce new fees. holding out this prospect that maybe they won't invest as much is tactical, but it's a very competitive industry. we have heard google might be getting into the business, creating its own wireless network. at&t is not going to slow down but they are going to do everything in their power to force the fcc to change tactics on these net neutrality rules. cory: this could have a big impact on capital expenditure plans.

>> if they slow down, they risk getting lapsed -- hitting lapsed -- getting lapped. cory: really interesting things going on in barcelona. let's get you to bloomberg top headlines -- in moscow thousands of mourners and dignitaries paid their respects to the slain russian opposition leader. the human rights foundation chairman spoke about the possible motives behind his murder. >> when you investigate the crime, you should look for the motive. he was the most vocal critic of putin's regime. you release numerous reports about violations of human rights and most importantly, he was about to release his new report about the presence of russian troops in ukraine.

cory: supporters are calling for new protests against letter putin. best buy is boosting its internet payments as it offers special dividends -- $.51, to increase its quarterly payout to $.23. they're hoping to/$400 million in operating expenses over three years. and live from beijing, it's saturday night -- the chinese version of the long-running comedy show is in the works. lorne michaels is teaming up with a chinese video streaming service -- they already stream the u.s. version of the show in china. "bloomberg west" will be right back. ♪

cory: i'm cory johnson. fab.com went from posh to nosh -- maybe a cautionary tale. the online retailer known for its wacky items like flying jesus cups and cat umbrellas --

this company got a billion-dollar valuation a year ago and today, it was purchased by an irish custom design group for $15 million. sarah frier covers fab. she is fab herself. from $1 billion to $15 million -- that's the wrong direction. >> it was bloomberg that wrote the story around the billion-dollar valuation, that there was trouble brewing. there were already revenue projections and investors who were not quite sure where things were going and yet the company was able to raise $325 million or more to fuel its vision. >> and may have apparently blown that. >> the saga is not over because the $15 million they were purchased for gets reinvested into this new product that the

ceo has. he started out as a gay social network and that launched as fab in 2011. it's just the same venture capital flowing through three different startups. cory: this company never had a billion dollars. where do they blow this money and they figured out how to start a business without blowing money? >> fab went through a lot of money, expanding internationally, getting warehouses to move to an inventory model and pulling up warehouses -- it was really difficult to figure out how to figure out what are things people would want to buy. what andy warhol qubes that were decorated that cost $349 -- how many of those should you put in your warehouse?

>> that is why retail is rough. that big round was 236 million dollars. who were the genius investors that put money into it at that relation? >> everyone from and recent -- >> andreessen horowitz took a flier on this thing at a pretty late stage and lost it all. >> who knows? jason goldberg says he's using that money and will try to make something happen. cory: a cautionary tale and i guess it's not going to be the last one. thank you very much. you can get the latest headlines all the time on your phone and on your tablet on bloomberg.com and bloomberg radio. we will see with more "bloomberg west" tomorrow. ♪